NEW YORK (Dow Jones)--Shares of exercise equipment maker Nautilus Inc. (NLS) jumped as much as 36% Monday, a week before it plans to release second-quarter results.
Analysts said they weren't sure what was driving the stock higher, but one said it could be optimism for positive news from the quarterly report.
"I don't think the actual results are going to be anything to write home about," Merriman Curhan Ford analyst Eric Wold said in an interview, adding the economy is still weak and it's the company's seasonally weakest quarter.
But he said investors will see a "much improved balance sheet from these guys at the end of the second quarter," as Nautilus - maker of the Nautilus, Bowflex and StairMaster fitness products - has worked to pay down debt.
"This is the first time they'll have net cash in about three years," Wold said.
A representative from Nautilus wasn't immediately available to comment.
In recent trading, shares soared 26% to $2.69 after earlier rising as high as $2.90. Shares have doubled in the past week and nearly tripled over the past three months.
Along with an improved balance sheet, Wold said Nautilus might say something about what it plans to do with its money-losing commercial division.
"There's optimism they could have some positive news about their commercial division, such as either selling it or shutting it down," Wold said. "It's one part of the business losing money...and they're getting close to making that decision."
In the first quarter, sales dropped 47% in the commercial division, helping lead to a much wider-than-expected loss and a sales decline of 44%. Analysts have said they don't expect the company to return to profitability until it sells its commercial division.
Nautilus plans to report second-quarter results Aug. 10. Analysts polled by Thomson Reuters most recently projected a per-share loss of 20 cents on revenue of $62 million.
-By Shara Tibken, Dow Jones Newswires; 212-416-2189; shara.tibken@dowjones.com;
